Tempur Sealy Earnings, Revenue Spike in 4th Quarter

In its fourth quarter of fiscal 2019, Tempur Sealy International Inc. beat the Zacks Consensus Estimate (Zacks Investment Research) on net sales by 12.4%. The Lexington, Kentucky-based mattress major posted net sales for the quarter of $871.3 million, a 28.9% increase, compared with the fourth quarter of 2018. Its net income grew 275.6% to $46.2 million. Earnings per diluted share increased to $0.84, compared with $0.22 in the fourth quarter of fiscal 2018.

Earnings before interest, tax, depreciation and amortization increased 44.3% to $112.4 million, compared with $77.9 million in the fourth quarter of fiscal 2018.

Gross margin was 44.3%, compared with 41.9% in the prior-year quarter, the company said.

Operating income increased 46.1% to $84.6 million. It included charges of $29.8 million associated with a wholesale customer bankruptcy.

RESULTS

Tempur Sealy’s 4th Quarter

Net sales

$871.3 million

Net income

$46.2 million

Earnings per share

$0.84

Tempur Sealy’s Full Year

Net sales

$3.1 billion

Net income

$189.5 million

Earnings per share

$3.42

In the fourth quarter, net sales in the North America business segment increased 36.3% to $719.2 million. Through the wholesale channel, sales grew 31.6% to $641 million. Net sales through the direct channel grew 93.6% to $78.2 million, driven primarily by growth from company-owned stores, which includes the acquisition of Sleep Outfitters.

Net sales in the international business segment increased 2.4% to $152.1 million, compared with the prior-year quarter. On a constant currency basis, they grew 4%. Through the wholesale channel, net sales decreased 1.2%, to $117.9 million. Through the direct channel, they grew 17%, to $34.2 million.

For the full fiscal year, net sales rose 14.9%, to $3.1 billion. Net income was $189.5 million, compared with $100.5 million for 2018. EBITDA grew 31.5% to $468.4 million and EPS increased to $3.42, compared with $1.82 in 2018.

“The investments we have made over the past four years strengthening the long-term foundation of our company have enhanced our competitive position,” said Scott Thompson, chair and chief executive officer. “We exited 2019 with all-time record fourth-quarter sales, adjusted EBITDA and free cash flow. The combination of our powerful omnichannel distribution platform coupled with our market-leading brands and products continues to drive market share gains and solid financial performance. We are carrying our momentum from 2019 forward, and we expect record full-year revenues and over 20% growth in adjusted EBITDA in 2020.”

The company currently expects full-year fiscal 2020 adjusted EBITDA to range from $575 million to $650 million.

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